Noida-based smartphone maker Lava International will raise $90 million over the next three years from GEM Global Yield Fund, part of the Global Emerging Markets Group, through a share subscription offer.
The deal will allow Lava to sell American depositary receipts (ADRs) to GEM in exchange for drawing available funds, which can be used entirely at Lava's discretion subject to certain requirements, it said in a statement.
An ADR is a negotiable security representing securities of a company that trades in financial markets of the United States.
Lava will use the capital for research, development and business expansion as the company aims to capture the sub-$150 cellular phone price segment.
GEM is a $3.4 billion alternative investment group that manages a diverse set of investment vehicles focused on emerging markets across the world. It has completed over 370 deals in 70 countries.
Founded in 2009, the mobile handset maker is present in over 20 countries.
The development comes at a time when Lava has been long lost from the top few spots of the mobile vendors market in India. As of January 2020, the names that lead the list in descending order of market share include Xiaomi, Samsung, Mobicel, Oppo, Realme and Apple, according to data available on Statcounter Global Stats.
Chinese players such as Xiaomi, Oppo, and Vivo, as well as Korea’s Samsung, have grown rapidly in the subcontinent’s smartphone market with their budget-friendly prices and features.
Counterpoint Research estimates that India overtook the US to become the second-largest smartphone market, with 158 million phones shipping to the country in 2019. China is the segment’s largest market.